New IRS Requirement

[Evan S. Golar]

I suggest all of you go to all your daily e-mail boards-

This afternoon IRS has instituted a NEW policy where ALL e-file providers must provide on an excel spreadsheet a whole mess of data - BY AUGUST 9TH (gives us all a whole lot of time)

Otherwise they're threatening us that we can't e-file.

Between 4-5PM this afternoon - I got like SIX e-mails pertaining to this.

The purpose of this whole thing is for IRS to more easily catch phishing and e-fraud.

[kcjenkins]

Here's TaxBilly's post explaining the situation as it affects most of us: [copied from the general board]

This is a copy of an e-mail a colleague received from the IRS regarding the questions she submitted (see below):

Thank you for sending me your question regarding the new rule issued by IRS on Monday, July 30, 2007.

The purpose of this rule is to develop a comprehensive list of valid websites used by EROs to prepare and e-file federal returns in order to guard taxpayers against phishing and pharming sites that may result identity theft. This rule applies to All authorized IRS e-file providers that obtain taxpayer information via the internet directly or through third parties in order to e-file federal returns. Taxpayer data is defined as any information that is obtained or used in the preparation of a tax return (e.g., Social security numbers, names, and addresses, dates of birth, income statements, and notes taken in a meeting).

The following EROs are not affected by this rule:

a.) EROs that do not have an internet website that obtain taxpayer information via the internet for the purpose of e-filing returns.

b.) EROs that do not have an internet website that obtain taxpayer information from a third party (not from the taxpayer directly) for the purpose of e-filing returns.

c.) EROs that only receive taxpayer data via e-mail.

d.) EROs that prepare returns and transmit their returns through third party transmitters

e.) EROs that prepare returns and use their providers website to e-file their returns (This site will be registered by the Provider)

Based on your description that you file your taxes through Tax Works, it does not appear that this rule applies to you.

We hope that this answers your question. For further information and the answers to additional questions about this rule please check the Frequently Asked Questions located on the IRS website or re-submit your question to this address. Please be as specific as possible to assist us in answering your question.

Justin J. McCarty , Sr. Program Analyst

Internal Revenue Service ID: 50-24246

Electronic Tax Administration - Strategic Planning Division

Relationship Management Office

Original e-mail inquiry to the IRS:

What is this all about????

I am a one person office. I go on line via either AOL, or internet explorer, and go to the E-services site and get information.

I e-file via my income tax software TAXWORKS. Do I have to have that for you? What is a portal? How do I encrypt? What is WINZIP9?

I am the only person here, I am the principal officer. Your notice says that an official must submit the excel spreadsheet and the password via separate e-mail messages.... what password?

[sschillercpa]

What is really silly about this requirement is that the IRS wants you to password protect a spreadsheet with Winzip 9, and then SEND THE PASSWORD IN A SEPARATE EMAIL TO THE SAME ADDRESS. This is lunacy! This protects nothing!